Gas Turbine Services Market Size, Share & Trends Analysis Report By Turbine Type, By Turbine Capacity, By Service Type, By Service Provider, By End Use, By Region, And Segment Forecasts, 2020 - 2027

Report Overview

The global gas turbine services market size was valued at USD 26.0 billion in 2019 and is projected to register a CAGR of 9.8% over the forecast period. The rise in environmental concerns owing to the high amount of carbon emissions from coal-based power generation has resulted in the adoption of low carbon emission power generation technologies such as natural gas-powered turbines. This eventually results in the rise in demand for services of these gas turbines globally.

Although natural gas-powered turbines are expected to gain popularity globally, particularly in the North American and European regions, emerging economies in the Asia Pacific such as India and China still rely on coal-based power generation owing to its lower costs. This factor is expected to hinder new gas turbine sales and maintenance contracts in the region in the future. Moreover, limited natural gas reserves are expected to restrict the growth of the market in the coming years.

The U.S. has a well-developed natural gas infrastructure and the presence of established key end-use industries, which are the major demand drivers for gas turbine services in the country. According to the Energy Information Administration, natural gas surpassed coal as the most common source for electricity generation in the U.S. in 2016. This has resulted in the rise in demand for maintenance services of gas turbines in the country.

Heavy-duty gas turbines accounted for the largest market share in 2019 followed by industrial and aero-derivative turbines. Although aero-derivative turbines account for a relatively lesser share as compared to other variants in the U.S. market, the future of small aero-derivative power generation looks promising owing to the development of the aerospace and defense sector in the country, where these turbines are used on a large scale. This would subsequently drive the demand for maintenance services for aero-derivative gas turbines in the U.S. in the coming years.

The rise in multiyear service contracts is one of the major factors driving the turbine service market globally. Plant operators find multiyear agreements to be an economical solution in the long term. These agreements can be signed for a range of services such as basic maintenance or overall maintenance. Basic maintenance includes preventive maintenance to full-service maintenance whereas overall maintenance comprises repair for concerned equipment.

Turbine Type Insights

Heavy duty turbines emerged as the largest segment, which accounted for a share of over 52.0% in the global market. It is also projected to witness the fastest growth rate over the forecast period. The growth of the segment is mainly attributed to the wide application scope of these turbines in chemical plants, refineries, and power utilities. Furthermore, heavy-duty turbines provide improved thermodynamic cycles and an optimized production process. Advancements in technology have also enhanced the power output, efficiency, and environmental compatibility of these turbines. These factors are projected to drive the demand for heavy-duty turbine services over the forecast period.

Industrial turbines accounted for a share of more than 38.0% in 2019 and are projected to register the second-highest CAGR over the forecast period. The segment is expected to witness growth owing to the ongoing development in industrial activities across the globe. Positive trends regarding the development of key manufacturing sectors across the globe are supporting the growth potential for industrial gas turbine services. This is due to the development of both heavy and light industries, which is projected to increase the need for services for gas turbines. Moreover, the growing population and rapid urbanization are creating an increased demand for electricity, which in turn drives the demand for industrial gas turbines and the subsequent need for services for these systems.

Turbine Capacity Insights

The >200 MW segment emerged as the largest segment with a share of over 39.0% in 2019. The development of the power generation sector along with an increased focus on generating electricity through sustainable energy resources is the major growth driver for this segment. Growing urbanization has a significant impact on the development of the building and cement industries. The projected growth of these end-use industries is estimated to drive the demand for large and heavy-duty turbines. Moreover, key OEMs such as General Electric and Siemens AG are expanding their operations, distribution, and aftersales facilities globally. They also offer multiyear maintenance contracts during the installation of new gas-based power plants.

The 100 to 200 MW segment accounted for the second-largest share in 2019. This is primarily attributed to the growth of end-use industries such as sugar mills, pharmaceuticals, oil and gas, plastic and resin manufacturing, glass manufacturing, and intermediate chemicals. On the other hand, the growth of the <100 MW segment is primarily driven by the rise in aerospace activities and the increasing application scope of turbines in the oil and gas sector. The smaller size of <100 MW turbines makes them an ideal product for offshore locations where the power-to-weight ratio is an important parameter while determining which turbine unit would be the most suitable option. The oil and gas industry is projected to regain its momentum shortly and would act as a major demand driver for <100 MW capacity turbines.

Service Type Insights

Spare parts supply emerged as the largest service type segment, which accounted for a share of more than 63.0% of the global gas turbine services market in 2019. This trend is projected to continue throughout the forecast period. The components of the gas turbine have a specific lifespan after which they require periodic replacement, thereby driving the growth of the segment.

Maintenance and repair emerged as the second-largest segment based on service type. Maintenance and repair activities are performed regularly in developed regions such as Europe and North America. The rise in awareness regarding the benefits of periodic maintenance and development in data collection technologies are expected to drive the growth of this segment over the forecast period.

An overhaul is projected to be the second-fastest-growing segment in the global market from 2020 to 2027. Overhaul comprises the inspection, repair, replacement, and disassembly of subcomponents. A gas turbine operates under harsh operating conditions which include corrosion, temperature, and stress. The power turbine and generator of the unit are exposed to high-temperature gases, along with vibration and thermal cycling which produce mechanical and thermal stress in turbine components. Exposure to combustion gases results in the corrosion of the power turbine and gas generator units and therefore requires replacing after a certain interval. These factors are expected to drive the need for overhaul services over the forecast period.

Service Provider Insights

OEM dominated the service provider segment of the market in 2019. This dominance is mainly attributed to factors such as technological capability, wide geographical presence, skilled workforce, and brand value of original equipment manufacturers (OEMs). In addition, OEMs have well-established R&D infrastructure as well as data management centers that enable them to observe the unit from remote locations to determine the accurate real-time health of the unit. OEMs also offer multiyear service agreements to buyers which cover a range of services. Also, OEMs generally offer multiyear agreements to buyers during new gas turbine installations. Most buyers prefer OEMs owing to their technological and service capabilities and opt for multiyear agreements, further enabling OEMs to consolidate their market position.

Furthermore, OEMs are aggressively expanding their presence by acquiring small-scale companies. For instance, GE Power acquired Alstom’s power and grid business, further enabling GE Power’s transformation into a digital industrial company. Similarly, Siemens AG acquired the aero-derivative gas turbine business of Rolls-Royce. Owing to these factors, OEMs will continue to maintain its dominant position in the market.

Non-OEMs service providers accounted for a market share of about 39.0% in 2019. They have a presence in price-sensitive markets such as India, China, and Thailand as consumers in emerging countries are shifting from OEMs to independent service providers to cut operational costs. This factor would support the growth of non-OEMs in price-sensitive areas in the future.

End-use Insights

Power generation emerged as the largest end-use segment in the global market with a share of over 62.0% in 2019. The increasing need for electricity drives the demand for gas turbines in the power generation sector. This segment is projected to register a CAGR of 9.1% over the forecast period. However, key competitors are still skeptical regarding the demand for gas turbines in the power generation segment. Volatility in the prices of natural gas acts as a restraint for the growth of the market in this segment.

Factors such as growing population, rise in industrial activities, and increasing vehicle ownership ratio are leading to high demand for oil production. This is projected to increase the application of gas turbines in the oil and gas industry, which faced a major challenge in the past owing to the drop in oil prices. In 2014 for instance, a barrel of oil cost over USD 100.0. The price, however, became less than USD 40.0 at the beginning of 2016. In contrast, oil prices started to recover after 2016 and started to increase at a slight rate as of 2018. These developments indicate a recovery in the oil and gas sector, thereby driving the growth of the segment.

Regional Insights

The Asia Pacific emerged as the largest market for gas turbine services in 2019. The regional market is driven by the demand for these services in China, Japan, Indonesia, and India owing to rapid urbanization and the increasing middle-class population. Furthermore, the rising demand for clean energy sources for power generation in these countries is expected to drive the regional market growth.

China has been heavily dependent on coal. However, coal consumption in this region witnessed a declining trend from 2013 to 2016 as the Chinese government initiated a national action plan for halting the growth of coal consumption and limiting emissions overall. This contributed to the progressive rise in gas turbine installations, primarily in medium- and large-scale industries in China.

North America, led by the U.S., Mexico, and Canada, accounted for a share of more than 20.0% of the global market in 2019. The market is primarily driven by shale gas reserves and technological advancements in extraction and mining technology, which consistently help lower the operational cost of extraction. Mexico is expected to witness a significant growth rate over the forecast period owing to the launch of the Development Program of the National Electric System for 2018-2032. Under this program, the government plans to add about 66.9 GW of additional power capacity across the country to meet the expected power demand until 2032. Under the newly installed capacity, combined cycle power plants will account for a share of around 42.0%. Moreover, 48 combined cycle power projects would be deployed until 2032, which would boost the demand for gas turbine services in the country.

Gas Turbine Services Market Share Insights

The key players in the market include General Electric, Siemens AG, Mitsubishi Hitachi Power Systems, Ltd. (MHPS), MAN Energy Solutions, Kawasaki Heavy Industries, Ltd., and Ansaldo Energia S.p.A.  These players adopt strategies such as providing multiyear services contracts to existing and new power plant owners to further enhance their market position. Competition among key vendors is based on the performance and efficiency of their manufactured gas turbines as well as associated services provided by them to their customers. Technological capability and R&D are some of the most important focus areas of companies to enhance their position in the market owing to the rapid change in technology and intense competition.

OEMs hold a dominating position in the market owing to their significant experience in providing power generation services and well-structured data management techniques. Moreover, OEMs are launching upgrades of existing gas turbines under service contracts to existing customers. For instance, in September 2018, General Electric launched a new 6B Repowering upgrade for turbines which can advance performance in both, gas turbines and combined-cycle operation. This development will enable General Electric to further enhance its share in the market.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global gas turbine services market report based on turbine type, turbine capacity, service type, service provider, end-use, and region:

• Turbine Type Outlook (Revenue, USD Million, 2016 - 2027)

  • Heavy Duty

  • Industrial

  • Aeroderivative

• Turbine Capacity Outlook (Revenue, USD Million, 2016 - 2027)

  • <100 MW

  • 100 to 200 MW

  • >200 MW

• Service Type Outlook (Revenue, USD Million, 2016 - 2027)

  • Maintenance & Repair

  • Overhaul

  • Spare parts supply

• Service Provider Outlook (Revenue, USD Million, 2016 - 2027)

  • OEM

  • Non-OEM

• End-use Outlook (Revenue, USD Million, 2016 - 2027)

  • Power Generation

  • Oil & Gas

  • Other Industrial

• Regional Outlook (Revenue, USD Million, 2016 - 2027)

  • North America

    • The U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • The U.K.

    • France

  • Asia Pacific

    • China

    • India

    • Japan

    • Indonesia

    • Malaysia

    • Vietnam

    • Bangladesh

    • Pakistan

    • Singapore

    • Thailand

    • South Korea

    • Taiwan

  • Commonwealth of Independent States

    • Russia

    • Ukraine

    • Turkey

    • Turkmenistan

    • Kazakhstan

    • Azerbaijan

    • Uzbekistan

  • Central & South America

    • Brazil

    • Argentina

  • Middle East and Africa

    • UAE

    • Iraq

    • Lebanon

    • Oman

    • Qatar

    • Kuwait

    • Algeria

    • Tunisia

    • Ghana

    • South Africa

    • Saudi Arabia

    • Egypt